L Brands increases first quarter guidance
L Brands, the parent company of Victoria’s Secret and Bath & Body Works, announced on Friday that it was increasing its first quarter earnings guidance from a range of $0.35 to $0.45 to a range of $0.55 to $0.65.
“We are pleased with our quarter-to-date performance at both Bath & Body Works and Victoria’s Secret. While the current environment still presents uncertainty, we have raised our earnings guidance for the first quarter due to strong sales and margin results quarter-to-date, which also contributed to an improvement in our expectations for the remainder of the quarter,” said Andrew Meslow, chief executive officer of L Brands.
Moreover, the company’s board shared plans to make a debt repayment of $1.035 billion, while executing a new $500 million share repurchase plan and reinstating the company’s annual dividend at $0.60 per share, beginning with the quarterly dividend to be paid in June.
“L Brands took a series of actions throughout 2020 to improve financial and operational performance, which led to record third and fourth quarter results, increased liquidity, and a year-end cash balance of $3.9 billion,” said Sarah Nash, board chair.
“The actions being announced today further support our effort to decrease leverage and enhance returns to shareholders, while better positioning the Bath & Body Works and Victoria’s Secret businesses for separation in August.”
Last month, L Brands reported fourth-quarter income of $860.3 million, or $3.03 per share, a significant improvement when compared to the net loss of $192.3 million, or $0.70 per share, posted by the company in the same period last year.
As usual, the company’s Bath & Body Works brand led revenue growth, while lingerie brand Victoria’s Secret continued to stagnate. L Brands currently intends to split Victoria’s Secret and Bath & Body Works into two separate, standalone companies. The process is expected to be complete by August.
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